NDA is forecasted to win 370 seats, according to the average of all exit polls and the markets are likely to react positively to pollsters’ predictions.
Motilal Oswal said the victory of PM Modi and the BJP augurs well for the economy and capital markets as it provides stability and continuity in policymaking with a single-party majority government, which will be expected to continue pushing its economic agenda.
Equity markets displayed some anxiety and nervousness recently around the impending political uncertainty, which resulted in a sharp rise in volatility in April and May 2024.
With this clear verdict, markets will heave a sigh of relief, according to brokerage, and go back to fundamentals and business-as-usual mode.Against this backdrop, Motilal’s model portfolio remains aligned with the key domestic cyclical themes amid a consistent backdrop of earnings growth.The brokerage remains overweight on financials, consumption, industrials, and real estate, industrials, consumer discretionary, real estate, and PSU banks.Among top ideas, Motilal Oswal likes ICICI Bank, SBI, L&T, Coal India, M&M, Adani Ports, ABB, HPCL, and Hindalco in the largecap pack, while Indian Hotels, Godrej Properties, Global Health, KEI Industries, PNB Housing, Cello World, and Kirloskar Oil are preferred in the midcap segment.
“Fundamentally, India is witnessing its own mini-Goldilocks moment with excellent macros, solid corporate earnings (Nifty ended FY24 with 25% earnings growth and FY25/26 earnings are likely to post 14-15% CAGR), focus on manufacturing, capex and infrastructure creation, and valuations at 20x one-year forward earnings,” Motilal Oswal said.
In this context, the brokerage believes the election verdict if proven true, and the consequent political stability and continuity in policy-making will act like an icing on the cake and keep India as the cynosure of all eyes.
